Health & Welfare Plans Newsletter

September 2, 2014

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Service Specialist
Christian Retirement Ministries
in CO

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1199SEIU Family of Funds
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The Newport Group
in NC

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United Retirement Plan Consultants
in AZ

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Goldleaf Partners
in ANY STATE

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Goldleaf Partners
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A National Trade Association
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in GA

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Professional Capital Services
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Webcasts and Conferences

Plan Sponsor Basics: Preparing for and Managing Plan Audits
September 10, 2014 WEBCAST
(Morgan Lewis & Bockius LLP)

Retirement Plan Hot Topics
September 11, 2014 WEBCAST
(IRS [Internal Revenue Service])

View All Webcasts and Conferences



[Official Guidance]

Text of IRS Draft Instructions for Forms 1094-C and 1095-C (PDF)
14 pages. "Forms 1094-C and 1095-C are not required to be filed by any employer for 2014. However, in preparation for the first required filing of these forms (that is, filing in 2016 for 2015), employers may, if they wish, voluntarily file in 2015 for 2014 in accordance with the forms and these instructions.... No employer shared responsibility payments under section 4980H will apply for 2014 for any employer, regardless of whether they voluntarily file for 2014." (Internal Revenue Service [IRS])  


[Advert.]

NBCH 19th Annual Conference -- November 10-12, 2014 - Washington, DC

Sponsored by National Business Coalition on Health [NBCH]

Employers, health plans, providers and other key stakeholders focus on improving health outcomes, lowering cost by benefit design, care management, payment reform, and reducing waste. Free admission for employers that are members of an NBCH coalition. Join us.



[Official Guidance]

Text of IRS Draft Instructions for Forms 1094-B and 1095-B (PDF)
5 pages. "Form 1095-B is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. Minimum essential coverage includes government-sponsored programs, eligible employer-sponsored plans, individual market plans, and miscellaneous coverage designated by [HHS]." (Internal Revenue Service [IRS])  

[Official Guidance]

Text of IRS Q&As on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056)
25 Q&As address: [1] Basics of employer reporting; [2] Who is required to report; [3] Methods of reporting; [4] What information must applicable large employer members report; and [4] How and when to report the required information. Updated August 29, 2014. (Internal Revenue Service [IRS])  

[Official Guidance]

Text of IRS Q&As on Information Reporting by Health Coverage Providers (Section 6055)
29 Q&As address: [1] Basics of provider reporting; [2] Who is required to report; [3] What information must providers report; and [4] How and when to report the required information. Updated August 29, 2014. (Internal Revenue Service [IRS])  

[Guidance Overview]

IRS Releases Draft Instructions for ACA Reporting Forms
"The instructions for the 1094-C and 1095-C are by far the most complex of the instructions released on August 28, filling 13 pages with dense, two column, print. Most of the complexity derives from the options for complying with the employer mandate and the transition exceptions to that mandate that the administration has created.... Employers may file multiple 1094-C transmittal forms for various company divisions, but must file one 'Authoritative Transmittal' providing comprehensive information on all of their employees. Related 'aggregated' employers must indicate this on the form.... Large employers must provide a 1095-C or alternative form to each full-time employee." (Timothy Jost for Health Affairs)  

[Guidance Overview]

California Legislature Passes Mandatory Paid Sick Leave Bill
"Beginning July 1, 2015, California employees will accrue one hour of paid sick leave for every 30 hours worked. Employees can begin using their paid sick days on the 90th day of their employment for their own health condition, a family member's health condition, and if the employee is a victim of domestic assault, sexual violence, and/or stalking.... Employers can limit an employee's use of paid sick days to 24 hours or 3 days in each year of employment. Employers are not required to pay out accrued unused sick leave at time of termination." (Ogletree Deakins)  

[Guidance Overview]

October 15th Deadline for Medicare Part D Creditable Coverage Notices
"When you must provide notices: [1] Before the annual Medicare Part D enrollment period (10/15 -- 12/7 each year), [2] Before the individual's initial Medicare Part D enrollment period, [3] Before group health plan enrollment, [4] When group health plan coverage ends (i.e., plan termination) or creditable status changes, and [5] Upon the individual's request. For the first two events, employers can satisfy the requirement by providing the notice to all plan participants before October 15th each year. The notice may be included in open enrollment packages and new hire or new enrollee materials." (Marsh Consulting Group)  

Waiting Period Uncertainty Remains for Some California Employers
"[M]any employers who chose 'early renewal' in 2013 in order to lock in pre-ACA rates for an additional 11 months will start new policy/plan years on December 1, 2014, raising the question of whether carriers will require compliance with the 60-day waiting period limit (a) for the balance of the 2014 calendar year; (b) for the entire 2014-2015 policy year; or (c) not at all, once the 2013-2014 policy year has come to a close. Early renewal was most prevalent among small group plans[.]" (E is for ERISA)  

New Massachusetts Law Requires Employers to Provide Leave for Victims of Domestic Violence
"An employee may take leave to seek or obtain medical attention, to obtain counseling, to obtain a protective order in court, to appear in court or before a grand jury, to meet with the district attorney or other law enforcement official about the abusive behavior, to attend child custody proceedings, or to otherwise address issues directly related to abusive behavior against the employee or the employee's family member, among other reasons. The employer can determine whether the leave is paid or unpaid." (Jackson Lewis P.C.)  

High Health Plan Deductibles Weigh Down More Employees
"Just as employers replaced pensions with retirement savings plans, more large companies appear to be in a similar cost-sharing shift with health plans. Besides making workers responsible for more of their care, employers hope these plans will motivate employees to comparison-shop for medical services -- an admirable goal but one that some say is hard to achieve." (The New York Times; subscription may be required)  

Five Ways ACA and Employers Shift Healthcare Costs to Employees This Open Enrollment Season
"[1] Unitized Pricing/Charging Per Child ... [2] Narrow networks ... [3] The Consumer Directed Health Plan (CDHP) ... [4] The 'Private Exchange' ... [5] Specialty Pharmacy." (Forbes)  

Work and Health Insurance for 50- to 64-Year-Olds (PDF)
"Nearly two-thirds (64 percent) of 50- to 64-year-olds had an employer-sponsored plan that they obtained through their own or a family member's current or former employer.... Among self-employed adults ages 50 to 64, 48 percent had employer-sponsored coverage (23 percent had coverage through their current or former workplace, and 25 percent were covered as a dependent on a family member's employer-sponsored plan). Twenty-three percent of self-employed adults ages 50 to 64 were uninsured." (AARP)  

What Happens When Health Plans Compete
"Many insurers did not participate in many of these exchanges in 2014. UnitedHealthcare, the nation's largest insurer with 84 million policies in force in 2010, did not participate in any exchanges. Had it done so, [one study] estimated that premiums would have been 5.4 percent lower. Had all insurers in each state's 2011 individual market participated in that state's exchange in 2014, premiums would have been 11 percent lower, saving $1.7 billion in federal premium subsidies." (The New York Times; subscription may be required)  

Small Businesses Still Ailing in Wake of ACA
"Advisers praised the fact that the availability of individual coverage -- whether on a public exchange or privately through an insurance agent -- allowed early retirees and entrepreneurial clients to walk away from the 9-to-5 grind and start their own businesses. But trouble has cropped up with group health insurance coverage for small business clients, and advisers say they're having a hard time finding affordable insurance." (InvestmentNews)  

States To Help Pay Obamacare Tax On Insurers
"[W]ith an $8 billion tax on insurers due Sept. 30 -- the first time the new tax is being collected -- the industry is getting help from an unlikely source: taxpayers. States and the federal government will spend at least $700 million this year to pay the tax for their Medicaid health plans. The three dozen states that use Medicaid managed care plans will give those insurers more money to cover the new expense." (Kaiser Health News)  

Benefits in General; Executive Compensation

Ninth Circuit Upholds 'Right to Control' as Primary Test of Independent Contractor or Employee Status
"The court held that the primary factor in determining whether a worker is an independent contractor or employee in California is the right to control the manner or means by which a result is obtained, regardless of whether that right is exercised. The court found the evidence overwhelmingly established that FedEx Ground retained the right to control the manner and means by which the work was performed. While drivers might have been permitted limited freedom to make certain decisions in performing the work, FedEx Ground retained all necessary control over the drivers." [Alexander v. FedEx Ground Package System, Inc., No. 12-17458 (9th Cir. Aug. 27, 2014) and Slayman v. FedEx Ground Package System, Inc., No. 12-35525 (9th Cir. Aug. 27, 2014)] (Kilpatrick Townsend)  

ERISA Advisory Council to Meet on September 22 (PDF)
"[T]he 173rd open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held as a teleconference on September 29, 2014.... The purpose of the open meeting is to discuss report s/recommendations for the Secretary of Labor on the issues of [1] PBM Compensation and Fee Disclosure, [2] Outsourcing Employee Benefit Plan Services, and [3] Issues and Considerations around Facilitating Lifetime Plan Participation." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor)  

40 Years of ERISA: Test Your Recollection
"ERISA has been modified by many pieces of legislation since it was signed into law on this day in 1974. In honor of ERISA's 'Big 4-0' we invite you to [1] find all of the abbreviations below for different acts that have amended ERISA and [2] come up with the full name for each abbreviated act." (Benefits Bryan Cave)  

Financing the Golden Years Among Senior Retail Executives
"The retail sector has demonstrated keen sensitivity to the potential financial impact of having unfunded benefit plan liabilities. This sensitivity is reflected in the fact that 88% of [non-qualified deferred compensation] plans sponsored by retail corporations are informally funded, according to [a] recent survey; this compares to only 75% of overall responses to the survey. Corporate-owned life insurance has emerged as the prefer red informal funding vehicle being utilized to reduce the risk of these unfunded benefit obligations." (Fulcrum Partners LLC, via PSX Magazine)  

[Opinion]

Text of Comments by American Academy of Actuaries to GASB on Exposure Draft on Reporting for Pension Plans Not Administered Through Certain Trusts, and Amendments to Certain Provisions of GASB Statements 67 and 68 (PDF)
"For pension plans that are not administered through trusts, the pay-as-you-go benefit payments can increase rapidly due to retirements. Consequently, we suggest that the Notes to the financial statements include a disclosure of the projected benefit payments for current members for the next ten years.... Given an objective of preventing the use of a discount rate equal to the long-term expected return when assets are not actually expected to accumulate significantly in advance of paying the benefits, we recommend GASB develop appropriate additional parameters to the crossover test while retaining the basic structure established in GASB 67 and 68." (Public Plans Subcommittee, American Academy of Actuaries)  

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